Are you struggling because you have bad credit? This economy has caused an unprecedented epidemic of bad credit. Thankfully, bad credit isn’t forever. Use these tips to learn how to repair your credit once and for all.
Planning is the first step to repairing your credit. You can’t just make up a plan and not change how you spend your money. Just buy what you need, and forget unnecessary purchases. Before purchasing an item, ask yourself if it is absolutely necessary and well within your financial means. If you cannot answer each of these in the affirmative, do not buy the item.
Any credit cards that have balances over 50% of your limit should be paid off until they are less than 50% of your limit. If any of your balances climb past half of your available credit limit, pay them down or spread the debt around other accounts, otherwise, your credit rating gets tarnished.
Credit Score
You will be able to buy a house and finance it if you maintain a good credit rating. When your mortgage is paid in full, you will be rewarded with increased scores on your credit file. Home ownership also means you have assets that you can rely on to increase your credit score. Having a good credit score is important if you need to take out a loan.
You need to work with the companies from whom you have credit cards. You should contact the company and request a lower interest rate or a due date change if necessary. You can do this by speaking with them and asking to change the monthly charges or due date.
Before you sign any debt settlement, research what effects it will have on your credit score. Some methods are less damaging than others; research them all before making an agreement with your creditor. The creditor is only interested in receiving the money due, and is not concerned with your credit score.
Read your negative reports carefully when attempting to rebuild your credit. You could find mistakes in dates and other factors which can cause the whole item to be removed from the report.
You cannot live a life that is beyond your means. This might require a re-thinking of your lifestyle. Getting credit has never been easier, making it just as easy for people to buy items they simply can’t afford. This, though, comes with a hefty interest price tag. Take a realistic look at your financial situation and determine how much you can actually spend.
You should get all terms and conditions in writing if you choose to deal with a creditor. This is for your protection. It allows you to have valid documentation of the terms in the event that a creditor reneges on its offer or changes owners. After you have paid your debt, request appropriate documentation that confirms your zero balance.
Avoid bankruptcy at all costs. The fact that you filed for bankruptcy is noted in your credit report and will stay there for 10 years. Bankruptcy may sound great because your debt goes away but there are consequences. Once you have filed for bankruptcy, it may become very difficult to secure a loan or open a new credit account.
Although they mean a lot to you, these statements are often set aside when lenders go over your credit history. The most it will do is draw more attention to the bad aspects of the report.
One of the biggest stressors can be bad dealings with debt collection agencies. Cease and desist correspondences can be legally used by a consumer to put off collection agencies; however they only help stop the harassing phone calls. Sending the letter does not mean you no longer have to pay the bill, it only stops the collection agency from calling.
When repairing your score, be cautious of law offices and lawyers that promise fixes for credit. Because so many people are having credit problems, predatory attorneys have appeared who charge exorbitant fees for useless or illegal credit score improvement schemes. Investigate any lawyer thoroughly before contacting them for credit assistance.
Credit Score
Whenever you apply for and open a new credit account, your credit score may drop. Resist the urge to apply for credit cards while shopping at your favorite retailer, even if they offer tempting promotions. Your credit score will lose points every time you apply for, or are offered, new credit.
If anyone trying to collect a debt makes threats, make a note of their illegal behavior. You need to know what the laws are that protect your rights as a consumer.
Contact your creditors directly to work out alternate payment plans if you are having difficulty making your monthly payments. If you contact the creditors, sometimes they will offer you a repayment plan which isn’t reported to the credit bureaus. To make this deal even better it can help you to not have as much strain on your finances which will let you focus on more important accounts.
Research debt consolidation as a possible solution to managing your debt more effectively. Consolidation could be your best shot for trying to reduce debt, therefore fixing your credit quicker. All of your debts are rolled into one payment making it easier to manage. Find out more about consolidation and how it could be applied to your situation.
If a poor credit rating has left you feeling discouraged, turn your situation around by applying the guidelines you have just read. These tips can help stop the free-fall of your credit score and start making your score rise.